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Wealth taxes seem so dumb to me. In many cases it's forcing sale of private or public company ownership from those who know the company best often to - you gue

Wealth taxes seem so dumb to me. In many cases it's forcing sale of private or public company ownership from those who know the company best often to - you guessed it - institutional investors. It's bad enough how much control institutional investors have, but to force it by law seems even more ridiculous. There has to be a better solution.

planb 4y ago
You had me for one second with that argument. But if you sell off your company, you would still get rich and be taxed - so why wouldn't you stay on board and your goal is not to get richer, but to create the best business you can?
- spullara 4y ago
  You have to sell the business to pay the tax. That is why wealth taxes are pretty dumb without carve outs for many kinds of assets.
  - FabHK 4y ago
    Why not sell 49% of the business?
    - kansface 4y ago
      The percentage doesn't matter. You have to pay taxes on the stock you own (ie, your startup). You do that by selling the stock. As the value of the company increases, you are forced to sell off increasingly large chunks of your stake to pay the bill thereby loosing ownership (control) in the process.
      - FabHK 4y ago
        With an estate tax, the value is assessed once, I'd assume (at death/inheritance), then due to be paid. You might have to sell of a third or whatever of the fortune/company, and keep the majority. Sure, over successive generations, the family might lose control of their original fortune/company, but that is compatible with the intention of the tax.
        kansface 4y ago
        You'd lose control much, much faster than that at the sort of rates being proposed. Even 1% per annum would destroy control well within a career, let alone a generation considering exponential growth. edit: Just noticed that you are talking about estate taxes and I'm talking about wealth taxes...
Swenrekcah 4y ago
This is the real problem. In theory it could be argued that a wealth tax and estate tax are the only really fair taxes in a capitalist economy. He who owns then capital is king, so tax the capital. But in reality it would as you say force all sorts of unwanted liquidation and monetisation of assets just to pay the tax.
- hpkuarg 4y ago
  Land value tax is the only really fair tax.
  - eropple 4y ago
    I used to think this, but over time I changed my mind. Plenty of capital, particularly in an increasingly digital economy, requires no land, and ignoring that privileges that digital capital even more than just not being tied to physical space does already.
lr4444lr 4y ago
To the concentration of wealth? Like what? Wish their was, but I haven't heard of it.
shigawire 4y ago
Better solution - sell off the company to the employees. This way you also promote worker ownership.
- nightski 4y ago
  It's a nice thought, my wife had an ESOP actually. She had a stake in the 5 figures when she left the company (it takes several years to vest and we can't touch it). But the problem is as an employee I don't really like my net worth tied up in my employers stock. I'd rather have it diversified and in an index fund. But what you propose is probably better than the alternative at least.

planb 4y ago

You had me for one second with that argument. But if you sell off your company, you would still get rich and be taxed - so why wouldn't you stay on board and your goal is not to get richer, but to create the best business you can?

spullara 4y ago
You have to sell the business to pay the tax. That is why wealth taxes are pretty dumb without carve outs for many kinds of assets.
- FabHK 4y ago
  Why not sell 49% of the business?
  - kansface 4y ago
    The percentage doesn't matter. You have to pay taxes on the stock you own (ie, your startup). You do that by selling the stock. As the value of the company increases, you are forced to sell off increasingly large chunks of your stake to pay the bill thereby loosing ownership (control) in the process.
    - FabHK 4y ago
      With an estate tax, the value is assessed once, I'd assume (at death/inheritance), then due to be paid. You might have to sell of a third or whatever of the fortune/company, and keep the majority. Sure, over successive generations, the family might lose control of their original fortune/company, but that is compatible with the intention of the tax.
      - kansface 4y ago
        You'd lose control much, much faster than that at the sort of rates being proposed. Even 1% per annum would destroy control well within a career, let alone a generation considering exponential growth. edit: Just noticed that you are talking about estate taxes and I'm talking about wealth taxes...

Swenrekcah 4y ago

This is the real problem. In theory it could be argued that a wealth tax and estate tax are the only really fair taxes in a capitalist economy. He who owns then capital is king, so tax the capital. But in reality it would as you say force all sorts of unwanted liquidation and monetisation of assets just to pay the tax.

hpkuarg 4y ago
Land value tax is the only really fair tax.
- eropple 4y ago
  I used to think this, but over time I changed my mind. Plenty of capital, particularly in an increasingly digital economy, requires no land, and ignoring that privileges that digital capital even more than just not being tied to physical space does already.

lr4444lr 4y ago

To the concentration of wealth? Like what? Wish their was, but I haven't heard of it.

shigawire 4y ago

Better solution - sell off the company to the employees. This way you also promote worker ownership.

nightski 4y ago
It's a nice thought, my wife had an ESOP actually. She had a stake in the 5 figures when she left the company (it takes several years to vest and we can't touch it). But the problem is as an employee I don't really like my net worth tied up in my employers stock. I'd rather have it diversified and in an index fund. But what you propose is probably better than the alternative at least.